The NY Times has an interesting story about how state tax agencies are stepping up their efforts to collect money from people who earn money in another state, but don’t pay the taxes they owe in that state:
When Josh Beckett pitches for the Red Sox at Yankee Stadium, New York collects income tax on the portion of his salary that he earned in New York State.
But what about a Boston Scientific sales representative who comes to New York to pitch medical products to a new client? New York has decided it wants a slice of that paycheck, too.
Anyone who crosses a state border for work — to make a sales call, say, or meet with a client or do a road show on Wall Street — probably owes income taxes in that state.
If you live in Boston but spend one out of 250 workdays this year in New York, you owe New York income taxes on 1/250th of your salary. And vice versa if you are a New Yorker visiting Boston — or Anywheresville, for that matter — for business.
Maybe I’m being foolish here, but I don’t know very many scientists (ok, none actually) who file taxes in the states where they go for conferences or professional meetings. Me, I’ve spent time this year already in Texas, and will most likely also be in Maryland and California. Any scientists (or anyone else) reading who file income taxes in states in which they do only a few days work? Because I don’t think most people do this.
It’s not even the money, but the hassle: if you end up traveling to seven different states for a couple of days, filling out seven additional tax return forms isn’t fun. If this isn’t done easily, I could see a lot people wanting to change this, perhaps by passing income or days of work minimums. This could really backfire on states: I could see Republicans and conservaDems pushing this sort of bill.